Major MP3 Site up for Sale on EBay

By Robert Menta- 1/21/2000

Ok. You own a personal web site and you built up some significant traffic. Traffic so noteworthy that you outdraw a site that loses tens-of-millions-of-dollars per quarter just trying to build its traffic.

Now here is the rub. The site is a digital music site, the hottest growing niche on the web today. So hot, money and lawsuits are flying around in an effort to take control of a burgeoning industry. A savvy person would say you have something valuable in your possession.

And, so it seems, would agree.

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Today, MP3board put itself on sale on net auction site EBay. Opening bid? Let's start out at $10 million and see where we go from there

Indeed, the deal is intriguing. On the Ebay listing, has put PC Data Online's report on MP3 site traffic for December 1999. It shows as the third largest drawing site on the net among sites with the letter MP3 in them. With 599,000unique users, outdraws (530,000), (520,000), and (485,000). Emusic is the site mentioned above who lost in the last three quarters $10 million, $12 million and $8 million respectively. Even - who have that basic URL name which alone would generate a $10 million asking price from cybersquatters - pulled only 312,000 users.

This all adds up to the obvious. If any of these sites are planning to drop a few mil on 30 second Super Bowl ads, maybe their money is better spent here. In fact, it would be a no brainer but...well, there is a slight dilema here.

You see, is the search engine of choice among what the likes of Sony Music refer to as Digital Music Pirates. You know, those slimy, thieving, morally bereft meanaces to society who happen to look like the average high school kid. MP3Board's whole attraction to users is that they can steal their favorite hit tunes through the links funneled at the site.

Heck, doesn't even have the decency to "instruct" its user base not to trade in pirate files ala Napster (wink,wink). Of course, Napster is being sued by the RIAA for something like $20 Billion, so that tells you how well that worked. It is quite possible that if someone like Sony bought this site, they could see what it's like to be on both ends of an MP3 litigation case.

But we don't use Sony as an example here lightly, Sony is busy perfecting the security on its proprietary ATRAC3 format, an MP3 competitor, for a reason. Sony would not be going through the bother unless it had plans of releasing its huge catalog of music on the net.

This won't happen until they know the content is safe. It doesn't matter whether they plan to sell the tunes or give select singles away to promote a new CD. They want to control the spread of their music.

When Sony succeeds in perfecting the ATRAC3 format, they still need to get the masses to use it. The biggest incentive for people to use it is Sony's music library. The problem is, much of this music is already being ripped and traded in the MP3 format. Sony needs a little more.

One plan, at least initially, is to use ATRAC3 songs as a free promotional tool. Once price is out of the way, Sony can leverage one of the biggest disadvantages of digital pirating. Because MP3 links are often unreliable, it is frequently a royal pain to successfully find and download a song you want.

If Sony were to create a one-stop-shop site with a perfect download success rate, that would be an attractive incentive for users to use Sony's site to get their favorite Mariah Carey tune. Sony can easily build such a site for a few million plus twenty or thirty more in marketing and ad expenses to draw traffic to it.

See where we are going here? Even the best sites on the net today will undergo a metamorphosis of some type as the Web matures. Sony can buy and its traffic in one full swoop and carefully transform it into something that would greatly serve their purpose.

If they can keep that traffic by retaining the user base with continued free music (all promotional) and then successfully wean them over to pay-for play tunes, Sony can save millions of dollars and many months of development costs. Just as important, they would immediately double their present traffic.

Of course, the key word here is if.

Copyright 2000 MP3 Newswire. All rights reserved.

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